Debated in Parliament on 16 Oct 2012.
Mr Zaqy Mohamad asked the Minister for Trade and Industry (a) whether the Ministry will consider exempting Town Councils from being categorised in the non-contestable segment of the retail electricity market even if average monthly consumption for HDB blocks is less than 10,000 kWh so as to reduce the cost of utilities and its burden on service and conservancy charges through negotiation for better electricity rates with energy service providers; and (b) what is the proportion of HDB blocks that currently qualify to be contestable consumers compared to the number of HDB blocks that can potentially qualify should Town Councils receive such an exemption.
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Mr S Iswaran (for the Minister for Trade and Industry): Currently, non-residential consumers with average monthly electricity usage of 10,000 kWh and above can opt for contestability. This allows them to buy electricity from retailers or directly from the wholesale electricity market at half-hourly spot prices. Non-residential accounts include those managed by the Town Councils for common property, such as corridors, void decks and open spaces of HDB blocks, as well as for commercial property within the town.
As of end-December 2011, there were about 6,200 accounts with SP Services under the management of the 15 Town Councils. Of these accounts, 5% are contestable and already buy their electricity directly from retailers or from the wholesale market. A further 7% are eligible for contestability, but have yet to opt in.
EMA has progressively liberalised the retail electricity market since 2001 by gradually lowering the contestability threshold to the current level of 10,000 kWh. Thus far, 75% of total electricity demand in Singapore has been opened up to competition. The remaining 25% of the market comprises mainly small commercial and industrial consumers, and individual households which consume much smaller quantities of electricity. These consumers continue to purchase their electricity from SP Services at the regulated tariff rates.
EMA is studying how retail contestability can be further expanded, including how Town Councils can participate more in the contestable electricity market. EMA is learning from the experience and developments in other jurisdictions, such as the UK, New Zealand and Australia, while also considering the need for adequate safeguards to ensure that consumers can benefit from contestability.
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